AI Spending Set to Soar by 52% as Retail Brands Accelerate Enterprise-Wide Innovation, IBM Study Reveals
A groundbreaking global study from the IBM Institute for Business Value (IBV) highlights a seismic shift in how retail and consumer product companies are embracing artificial intelligence (AI). According to the report, titled “Embedding AI in Your Brand’s DNA,” surveyed executives anticipate a staggering 52% surge in AI spending beyond traditional IT budgets over the next year. This marks a pivotal moment in the evolution of AI, as businesses pivot from viewing it as a niche tool to positioning it as a cornerstone of enterprise-wide innovation.
By 2025, retail and consumer products companies plan to allocate an average of 3.32% of their revenue—equivalent to $33.2 million annually for a $1 billion company—to AI initiatives. These investments will span critical functions such as customer service, supply chain optimization, talent acquisition, and marketing innovation. The findings underscore the growing recognition of AI’s transformative potential across all facets of business operations.
Key Insights: How AI is Reshaping the Retail Landscape
Rapid Adoption Across the Enterprise
The study reveals that 81% of surveyed executives and 96% of their teams are already leveraging AI to a moderate or significant extent. However, these leaders aren’t stopping there—they’re planning to expand AI usage into more sophisticated applications like integrated business planning, with projected growth of 82% by 2025. This underscores the urgency for organizations to scale AI capabilities across departments to stay competitive.
Workforce Transformation and Human-AI Collaboration
As AI adoption accelerates, workforce transformation remains a top priority. Surveyed executives predict that 31% of employees will need to learn new skills to work effectively with AI within the next year—a figure expected to rise to 45% within three years. In customer service alone, AI use for personalized responses and follow-ups could grow by 236% in the next 12 months compared to the prior year. Notably, 55% of these advancements are expected to involve human-AI collaboration, while only 30% will be fully automated. This highlights the importance of reskilling employees to ensure seamless integration of AI technologies.
Investment in AI Ecosystem Platforms
To drive innovation and efficiency, companies are increasingly investing in ecosystem platforms—tools that facilitate data exchange and AI model sharing. Respondents expect adoption of these platforms to soar from 52% today to 89% within three years. By collaborating with technology partners and blending AI capabilities, brands aim to unlock new levels of operational agility and market differentiation.
Closing the AI Governance Gap
Despite widespread enthusiasm for AI, governance remains a challenge. While 87% of surveyed executives claim to have clear AI governance frameworks, fewer than 25% have fully implemented tools to manage risks such as bias, transparency, and security. This gap in operational oversight poses significant challenges, emphasizing the need for robust policies and continuous monitoring to build trust and accountability.
AI as a Strategic Imperative
“AI is no longer just a tool; it’s a strategic imperative,” said Dee Waddell, Global Industry Leader for Consumer, Travel & Transportation Industries at IBM. “Retail and consumer product companies are at a tipping point where embedding AI across their operations can help define not just productivity gains, but the future of brand relevance, engagement, and trust.”
For brands to succeed, they must transition from viewing AI solely as a productivity booster to recognizing it as a core driver of enterprise innovation. This transformation requires rethinking traditional governance models, fostering cross-functional collaboration, and aligning AI initiatives with brand priorities. Strategic partnerships with startups and tech companies can also play a vital role in accelerating innovation and delivering long-term competitive advantages.
IBM at NRF 2025: Showcasing AI-Driven Innovation
AI will take center stage for IBM at NRF 2025, where industry experts will showcase how the technology is revolutionizing customer engagement, personalization, and operational efficiency. Attendees can explore innovative use cases in marketing, supply chain management, and sustainability at Booth #4639. Stay updated via IBM’s NRF webpage using the hashtag #NRF2025.
Methodology
The IBM IBV, in collaboration with Oxford Economics, surveyed 1,500 global retail and consumer products executives across 15 countries in Q3 2024. Half of the respondents represented the retail sector, while the other half came from the consumer products industry. Participants provided insights through multiple-choice questions, numerical inputs, and Likert scales, offering a comprehensive view of their expectations, results, concerns, and barriers related to scaling AI and generative AI (Gen AI) within their enterprises and ecosystems.
Through advanced statistical analyses, including pairwise comparisons and hierarchical clustering, the IBM IBV identified key trends and disparities among respondents. All findings were statistically significant at the p < 0.05 level.
